The Hindu : Kerala / Thiruvananthapuram News : KSCB action against 15 defaulters

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Saturday, Sep 01, 2007
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Kerala

Kerala - Thiruvananthapuram

KSCB action against 15 defaulters

N.J. Nair

Members of previous director board also in the dock

Non-performing assets put at Rs.67.99 crore
Net loss in 2006-07 touched Rs.22.50 crore

THIRUVANANTHAPURAM: The Kerala State Cooperative Bank (KSCB) has initiated legal action against 15 major defaulters who have been declared non-performing assets (NPAs) with Rs.67.99 crore in arrears as also against members of the previous director board who flouted rules and procedures to give away loans indiscriminately.

Governmental clearance has been sought for taking departmental action against three IAS officials who had served as managing directors of the bank. This is part of the steps being taken to recover NPAs which has risen to Rs.350 crore. The individual NPA outstandings range from Rs.1.71 crore to Rs.8.06 crore. The bank has filed vigilance complaints against the debtors and members of the previous director board who are public men and recommended departmental action against the officers

Bank sources told The Hindu that the net loss of the bank in 2006-07 has touched Rs.22.50 crore, up from Rs.2.59 crore in 2005-06.

Huge loans

Indiscriminate sanctioning of huge loans which turned to become NPAs is being pointed out as one of the main reasons for the mounting loss.

Both individuals and institutions are among the defaulters. Legal action has been taken on the basis of an inquiry conducted by the Vigilance wing of the bank. On detecting irregularities in the sanctioning of loans, the bank has placed 11 officers under suspension. Disciplinary action will be taken against more officers responsible for sanctioning loans during the tenure of the previous board, sources said.

The previous director board had sanctioned fresh loans to a number of institutions and individuals and had also taken over loans given by other banks ignoring warnings that they had already turned NPAs. The Vigilance wing is understood to have detected that some of the creditors had furnished forged documents to avail themselves of huge amounts and some others managed to secure the loans without providing any security. Even the preliminary inquiry and verification of documents which are mandatory for clearing the loans were not carried out, sources said.

According to rules, before sanctioning a loan, the bank should confidentially verify the financial position of the applicant.

The director board is understood to have neglected the warnings of certain nationalised banks against giving fresh loans to some of the applicants.

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